Voice Over DSL Services to Reach $1 Billion in 2000; Small Businesses Represent the VoDSL Goldmine! - Industry Trend or Event

Cambridge Telcom Report, August 16, 1999

According to a recent report released by Cahners In-Stat Group, Voice over DSL (VoDSL) is the "killer application" for the Digital Subscriber Line market (DSL).

The ability to provide integrated voice and data services over a single copper pipe elevates the role of DSL from a data access alternative to a platform for offering value added services.

"VoDSL fundamentally changes the business model for CLECs by providing them with an economic means for offering voice services in addition to data services," said Peter Meade, senior analyst for Cahners In-Stat Group's Advanced Carrier Strategy Service.

"CLECs are not the only winners, ILECs will also be better positioned to offer affordable services to the growing small business market and will be able to utilize their existing copper more efficiently."

Cahners In-Stat Group research found:

-- US Small Businesses with 20-49 employees present the greatest opportunity for VoDSL deployment

-- SOHO and residential users are not likely to adopt VoDSL as an alternative in the next two years

-- Trials and evaluations in 1999 and early 2000, followed by real deployments in the second half of 2000 will result in over a $1 billion market for VoDSL services by the end of that year

-- Partnerships between pure-play VoDSL vendors CopperCom, Jetstream and TollBridge, and DSL hardware vendors, are critical for early interoperability and mind share.

"The opportunity presented by VoDSL is expected to increase DSL penetration among small businesses and speed CLEC and ILEC deployments," said Shannon Pleasant, senior analyst for Cahners In-Stat Group's Voice and Data Communications Group.

"As the many announced partnerships demonstrate, the ability to integrate VoDSL quickly within existing platforms to offer an end-to-end DSL solution will be critical for quick deployment and early adoption."

The report, VoDSL: The Killer App, No. WN9909BA, forecasts service revenues and subscribers for the VoDSL market. To purchase the report call 617/558-2144. Cahners In-Stat Group (http://www.cahnersinstat.com) is a high-technology market research firm with comprehensive understanding of computer and convergence, networking, wireless, telecommunications, Internet and semiconductor markets.

Headquartered in Newton, offices are also located in Scottsdale, Ariz. and San Jose, Calif. Cahners In-Stat Group is part of Cahners Business Information, the largest publisher of specialized business publications in the United States and a division of Reed Elsevier.